Government publishes response to carbon price floor consultation

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The government has today published its response to the carbon price floor consultation.

The government has today published its response to the carbon price floor consultation. The consultation set out the government’s proposal to provide greater support and certainty to the price of carbon in the power sector, to encourage investment in low-carbon electricity generation. In line with the rates set out at Budget last week, the government confirms that:

the target carbon price for 2013-14 will be around £16 per tonne of carbon dioxide (tCO2), which is £19.16 in 2013-14 prices

taking this rate and subtracting the forecast Emissions Trading Scheme (ETS) rate for 2013-14 (£14.21/tCO2), the support rate for 2013-14 will be £4.94/tCO2

prospective support rates for 2014-15 and 2015-16 are £7.28/tCO2 and £9.86/tCO2 respectively. Budget 2012 will confirm the carbon price support rates for 2014-15, and set out indicative rates for the subsequent two years

in line with the consultation, the price floor will target £30 per tonne of carbon dioxide in 2020, rising to £70 in 2030 (based on 2009 prices)